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Wednesday, March 25, 2009

Dear Mr. DeSantis: Your Resignation from AIG via NYT ...

The plot continues to thicken in the A.I.G. story, despite this tale being in denouement. The saga climaxed probably last week with CEO Edward Liddy's testimony to Congress about death threats and President Barack Obama saying he'll take responsibility.

By the time it moved to revelations that U.S. Treasury Sec'y Geithner created a loop hole so the $165 million plus in bonuses could be paid to American International Group executives and New York Att'y General Cuomo on Monday saying he's gotten AIG's top bonus recipients to return $50 million in bonuses, public outrage had reduced from boil to a lively simmer.

Consider how easily people ignored what Obama said on Jay Leno's show about AIG because they had a new beef, insults to Special Olympics participants. Ah, the public, afflicted with short-attention spans, yes.

So, I doubt that as many people who have been outraged by the A.I.G. fiasco are also aware that one of its former employees published his resignation in The New York Times yesterday. Per the paper, "Jake DeSantis, an executive vice president of the American International Group’s financial products unit, (emailed his resignation) to Edward M. Liddy, the chief executive of A.I.G."

You can read the full letter at the NYT site under "Dear A.I.G., I Quit!" In it DeSantis says that he had nothing to do with "the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage."

He also says that he is donating all of his post-retention money to those impacted by the global economic crisis, and he claims he's worked the last year for nothing:

I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down. (DeSantis)

He says that Liddy did not properly defend people like him when Liddy testified to Congress and that A.I.G. senior management is now reacting out of fear and Cuomo's threats to "name and shame" them all.

If it's true DeSantis and others worked for $1 for a year to help dismantle the company, then I think he's rightfully angry and frustrated. If we ignore that he agreed to work for a year for $1 in anticipation of some future payday, then this information means that in his case, the company's retention payment was compensation to him for services rendered and not a "bonus" as has been presented in the press, a point not clarified during Liddy's testimony to Congress.

The employees agreed to work for $1 and were promised a bigger pay-day. What a gamble! But where was the big pay-off money supposed to come from? If it was coming from mysterious profits, then that never happened, right? It's similar to people who agree to work for start-ups in which they have great faith in exchange for stock that could one day be worth millions or less than the paper on which it's printed.

Or did A.I.G. promise its executives big payoffs based on tax payer bailout out money?

DeSantis's resignation letter leaves me with the same opinion I had before: A.I.G. has been mismanaged with shady deals and copious doses of ego-tripping.

DeSantis should get more than $1 for his year of hard work (did that include full health benefits? I hope so.), but it would still be hard to sell to the average American earning less than six figures that he or any other A.I.G. employee should get $747,000 or more after taxes for that one year of service, M.I.T. degree or not.

In addition, most Americans could not afford to agree to work for one year for $1. So,(if you ignore that DeSantis was promised a retention payment of more than $1 million gross after working a year at $1) while his decision to not draw a real salary for a year is commendable, that he could make such an arrangement indicates he had a much bigger financial cushion to help him through that year than your average American Joe or Jane. Many Americans live paycheck to paycheck.

Nevertheless, this man is donating his retention money, whatever that will be if Congress adds additional taxes, and he is sharing his pain, and so, since he resigned not only by email but also in a major newspaper, he deserves a response from the public. Here's my answer.

Dear Mr. DeSantis:

I feel for you, sir, and if you say you didn't have anything to do with the tricky mortgage swaps that brought down A.I.G., I believe you because A.I.G. is a massive corporation. I doubt the fly on its left butt cheek can see the fly on its right.

You say the units you managed were consistently profitable, and so, I guess that means you are good at your job. I'd expect no less from an M.I.T. graduate and the son of hard-working school teachers. Also, based on your family background and how you made your way through M.I.T., I believe you know the value of a $1, no pun intended on that yearly salary you accepted in the name of duty and honor.

Furthermore, I understand your frustration and anger at how Mr. Liddy has handled this mess and how you and your former co-workers have been portrayed in the media and in blogs also. This will sound harsh, but that's life. "You lie down with dogs, you get up with fleas," as my grandmother used to say.

Also, about your giving back the money, my grandmother used to quote the Bible as well and say things like "God loves a cheerful giver." The lesson taught being a gift given grudgingly doesn't mean as much. She also used to remind us that giving in secret is better because nobody likes a show-off and the purer the motivation for giving, the better.

So, if you really think you're not at fault for what happened with A.I.G. and that you're giving this money back under duress with anger in equal measure and, further, that you hope to escape public stigma by giving the money back in the open so we all know you did so, then maybe you should keep the money. There's no shame in keeping what's rightfully yours, no matter how much New York Att'y General Cuomo growls at you.

I wouldn't be one of those yelling "It's the principle of the matter" here. You know what the old folks say: "When anyone says it's not about the money but the principle of the matter, it's the money!" Just a thought. I'll fist-bump you on that one; folks messing over your money sucks!

Mr. DeSantis, I know it's hard to relax while you watch your retirement fund go swirling down the toilet with your tax dollars and mine, but please don't get an ulcer over this A.I.G crap. Additionally, I understand that you wanted to get your resentments on the public record. Confession and healthy venting are both good for the soul, and so I hope you'll sleep well at night for the rest of your life.

I accept your resignation, sir. Best of luck to you and yours. And, Mr. DeSantis, I'm guessing you'll land on your feet.

9 comments:

As always, Nordette, you hit it right on the head. Some time ago, I wrote something on my blog about how people seem to have gotten the words "earned" and "entitled to" completely confused. The AIG letter reeks of entitlement and a distressing lack of awareness as to how hard the rest of the world works without promises of enormous paydays. And if he's one of the "good guys," we are in bigger trouble than we ever imagined.

Also, knowing the job market here, there is no way that his co-workers turned down job offers at more stable firms (there are no stable firms these days, and no jobs, either) and stayed at AIG in anticipation of a big bonus, which even if it were true, sort of contradicts the idea that people were doing it to help the nation. The letter would actually be hilarious if it were intended to be satire and not a whiny plea for my sympathy.

After reading this post, I come away with the same opinion of AIG that I had before: Like so many of the people who run corporations driven today by greed; anyone who can work in New York city for 365 days without a paycheck ain't got no financial problems.

If execs at AIG were promised monetary compensation at a later date, the promise was shallow, empty and just as worthless AIG. "You can't give what you ain't got and you can't get something you never had."

In spite of spending the last 365 days working for AIG, this guy will land on his feet while so many don't even have shoes.

I have no sympathy for someone (with financial stability) doing a decent thing. The corporation I work for has a saying regarding performance, "this is what you're supposed to do."

If this Mr. DeSantis seriously gave a (expletive), he wouldn't have tried to make his penitence nearly so public. He'd have gone with tail between his legs - bonus or not like the pitiful jackal he sounds like...

Yep! Just like I thought. We had a lot of the same things to say on this issue. Great post.

In my commentary, I also tied Mr. DeSantis' situation to one with a family living in Hollywood and how they're circumstances are very different from his http://www.megansminute.com/2009/03/an-aig-resignation-hollywood-layoffs.html